GROUP OPERATING RESULTS
Profit for the first nine months of 2016 amounts to €807 million, an improvement of €185 million (29.7%) on the same period of the previous year.
Operating profit is up 28.6% from €930 million for the first nine months of 2015 to €1,196 million for the first nine months of 2016, benefitting from the positive performances of the various sectors in which the Group operates.
The Postal and Business Services segment made a positive contribution of €35 million to operating profit (an operating loss of €137 million in the same period of the previous year), essentially reflecting the positive contribution from the fees paid by BancoPosta RFC in return for use of the Group’s distribution network.
The Financial Services segment recorded an operating profit of €704 million (€670 million in the first nine months of 2015), primarily linked to non-recurring income generated by the sale of the Group’s investment in Visa Europe Ltd.8 , which took place as part of Visa Inc.’s acquisition of this company, and to returns on BancoPosta RFC’s investments, on which distribution revenue depends.
The Insurance Services and Asset Management segment reports operating profit of €436 million (up 18.5%) and an excellent operating performance, with €15.4 billion in premium revenue during the period (€14.5 billion in the first nine months of 2015).
Reclassified consolidated statement of profit or loss
| For the nine months ended 30 September | Increase/(decrease) | ||||
|---|---|---|---|---|---|
| (€m) | 2016 | 2015 | Values | % | |
| Revenue from sales and services and insurance premium revenue | 21,794 | 21,041 | 753 | 3.6% | |
| Postal and Business Services | 2,687 | 2,783 | (96) | -3.4% | |
| Financial Services | 3,501 | 3,504 | (3) | -0.1% | |
| Insurance Services and Asset Management | 15,438 | 14,575 | 863 | 5.9% | |
| Other Services | 168 | 179 | (11) | -6.1% | |
| Other income from financial and insurance activities | 3,887 | 2,828 | 1,059 | 37.4% | |
| Financial Services | 602 | 441 | 161 | 36.5% | |
| Insurance Services and Asset Management | 3,285 | 2,387 | 898 | 37.6% | |
| Other operating income | 48 | 52 | (4) | -7.7% | |
| Postal and Business Services | 41 | 46 | (5) | -10.9% | |
| Financial Services | 4 | 4 | - | n/s | |
| Insurance Services and Asset Management | 2 | - | 2 | n/s | |
| Other Services | 1 | 2 | (1) | -50.0% | |
| Total revenue | 25,729 | 23,921 | 1,808 | 7.6% | |
| Cost of goods and services | 1,809 | 1,874 | (65) | -3.5% | |
| Net change in technical provisions for insurance business and other claims expenses | 17,449 | 15,475 | 1,974 | 12.8% | |
| Other expenses from financial and insurance activities | 360 | 674 | (314) | -46.6% | |
| Personnel expenses | 4,333 | 4,370 | (37) | -0.8% | |
| Capitalised costs and expenses | -15 | -21 | 6 | 28.6% | |
| Other operating costs | 158 | 194 | (36) | -18.6% | |
| Total costs | 24,094 | 22,566 | 1,528 | 6.8% | |
| EBITDA | 1,635 | 1,355 | 280 | 20.7% | |
| Depreciation, amortisation and impairments | 439 | 425 | 14 | 3.3% | |
| Operating profit/(loss) | 1,196 | 930 | 266 | 28.6% | |
| Finance income/(costs) | 14 | 41 | (27) | -65.9% | |
| Profit/(loss) on investments accounted for using the equity method | 7 | - | 7 | n/s | |
| Profit/(Loss) before tax | 1,217 | 971 | 246 | 25.3% | |
| Income tax expense | 410 | 349 | 61 | 17.5% | |
| Profit for the period | 807 | 622 | 185 | 29.7% | |
n/s: not significant
Total revenue by operating segment
| (€m) | 2016 | 2015 | Increase/(decrease) | |
|---|---|---|---|---|
| Postal and Business Services | 2,728 | 2,829 | (101) | -3.6% |
| Financial Services | 4,107 | 3,949 | 158 | 4.0% |
| Insurance Services and Asset Management | 18,725 | 16,962 | 1,763 | 10.4% |
| Other Services | 169 | 181 | (12) | -6.6% |
| Total revenue | 25,729 | 23,921 | 1,808 | 7.6% |
Total revenue of €25.7 billion is up 7.6% on the same period of 2015. The improvement primarily reflects the positive performance of insurance services and asset management, where total revenue amounts to €18.7 billion (up 10.4% on the first nine months of 2015).
Postal and Business Services contributed total revenue €2,728 million, registering a reduction of 3.6% due to the expected decline in traditional letter post. It should be noted that there has been an ongoing slowdown in the pace of decline in this segment’s total revenue over a number of quarters. Despite this, the decline in revenue from traditional letter post is only partially being replaced by revenue from the parcels business.
Total revenue from Financial Services amounts to €4,107 million, marking an increase of 4.0 due to a rise in “Other income from financial activities”, which is up from €441 million in the first nine months of 2015 to €602 million in the same period of 2016. This income includes €121 million in non-recurring income generated by the sale of the Group’s investment in Visa Europe Ltd.
The Insurance Services and Asset Management segment which, from 1 January 2016, also includes the activities of BancoPosta Fondi Sgr, delivered excellent results during the period (€18.7 billion in total revenue), with Poste Vita and its subsidiary, Poste Assicura, recording premium revenue of €15.4 billion (premium revenue of €14.5 billion in the same period of 2015). This primarily reflects the performances of traditional Class I investment and savings products, where the Group has built up a strong presence.
Total revenue from Other Services amounts to €169 million (€181 million in the same period of 2015) and is generated by Poste Mobile.